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To: Kenneth E. Phillipps who wrote (2205)	3/13/1999 7:53:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 14638

To: zbyslaw owczarczyk (10264 ) From: Glenn McDougall Saturday, Mar 13 1999 7:50AM ET Reply # of 10265 BCE looks due south for partnership Up to 20% stake: Ameritech possible ally for Canadian icon Michael Lewis, with files from Theresa Tedesco Financial Post BCE Inc. is considering a deal with a U.S. partner that could see a Baby Bell take a significant equity stake in Canada's largest publicly traded company, industry observers and sources close to BCE said yesterday. They said a research firm has been conducting focus groups in Ottawa and Montreal to gauge public reaction to the prospect of BCE, which controls quintessentially Canadian corporation Bell Canada, ceding as much as a 20% share to a U.S. interest. BCE spokesman Don Doucette acknowledged the Montreal-based holding company is in discussions at any given time with "several players," including telecommunications companies in the United States, talks that could lead to an equity arrangement. He said officials could be willing to sell a share in BCE, whose stock is the most widely held in Canada, but would not say if a deal is in the works. Mr. Doucette did allow, however, that "this is increasingly a North American market," noting Bell last week announced a strategic alliance with long-distance company MCI WorldCom Inc., based in Jackson, Miss., that will see Bell distribute MCI's data and voice products, excluding Internet services, to business customers across Canada. Eamon Hoey, a telecommunications industry consultant in Toronto, said one prospective BCE partner could be Chicago's Ameritech Corp., which controls regional phone companies in Michigan and Illinois and has customers in 40 countries. Other sources suggested Ameritech is now conducting due diligence of BCE and may acquire a 20% share in a multi-billion-dollar transaction. Mr. Doucette would not comment on the speculation. "We have no announcement to make at this point," he said. And Ameritech spokesman Geoff Potter declined to say if the company is pursuing an entree into Canada and said he was not aware of a pending partnership with BCE. Ameritech, which is merging with SBC Communications Inc. in a $62-billion (US) deal expected to close in the second half of 1999, has taken equity minority positions in telephone and cellular companies around the world, particularly in Europe. Mr. Hoey said BCE could be interested in a partnership with Ameritech or another U.S. local and long-distance voice and data carrier to strengthen its reach beyond Canada. Ameritech, with more than $50-billion (US) in assets, offers cellular, paging, cable and Internet products, along with local and long-distance calling in 50 states. Mr. Hoey said an Ameritech position in BCE could freeze out Bell Atlantic Corp., which will have a stake in Bell Canada competitor BCT.Telus Communications Inc. as a result of a pending merger with GTE Corp. News of BCE's discussion with possible U.S. equity partners follows last week's announcement that New York-based AT&T Corp.'s Canadian unit is merging with MetroNet Communications Corp. in a deal valued at $7-billion. Earlier this year, Bell announced plans to transfer its entire operator division to an Arizona-based call centre company. It has since relented and said it will take a majority stake in the U.S. company. It will offer operators employment in Canada with a new division.